Chinese carmakers lead Indonesian EV market

author: FutureCar Staff    

Electric vehicle (EV) sales in Indonesia are expected to experience rapid growth, despite currently being a niche product. At the recent Gaikindo Indonesia International Auto Show, Chinese carmakers Neta Auto and Great Wall Motor showcased their sleek electric car models, aiming to tap into the increasing demand for eco-friendly vehicles in the country. The Indonesian government is actively promoting EV production and offering consumer subsidies to boost domestic demand.

Neta Auto, which presented three models at the show, plans to establish an EV assembly line in Indonesia next year. Great Wall Motor Group showcased the Ora Good Cat, a compact electric hatchback with unique features that drew the attention of onlookers. While Japanese automakers dominate the Indonesian car market, they have been slow to introduce electric cars due to infrastructure limitations and a lack of incentives. Chinese companies are now looking to fill this gap.

Despite the potential for growth, EVs currently make up a small fraction of total automobile sales in Indonesia. In 2022, only 10,327 electric battery-powered cars were sold, accounting for about 1% of combined car sales. However, the government aims to have 400,000 electric four-wheelers and 1.8 million electric two-wheelers on the roads by 2025. Challenges such as the insufficient number of charging stations, high costs, and inconsistent policies need to be addressed to achieve this goal.

In an effort to boost the demand for electric vehicles, the government has introduced a subsidy program that covers the sales of electric motorcycles and cars, as well as the conversion of combustion-engine motorcycles to electric propulsion systems. Producers also benefit from zero percent export duty and value-added tax for electric cars and buses that meet certain domestic content requirements. The government aims to develop domestic EV production facilities to utilize the country's rich reserves of nickel, a key component of EV batteries.

The Indonesian government's push for electric vehicles aligns with its goal to reduce greenhouse gas emissions by 29% by 2030. Chinese electric car makers face competition not only from Japanese brands but also from South Korean, American, and European players. French carmaker Citroen and Germany's Mercedes-Benz showcased their electric vehicles at the Indonesia auto show. The government has also expressed interest in attracting American manufacturer Tesla to invest in car and battery manufacturing in the country.

Chinese carmakers, such as Wuling, have already made early investments in Indonesia and gained a head start in the market. Wuling sold 8,000 units of its popular AirEV small electric car last year, accounting for approximately 80% of Indonesia's four-wheel EV sales. The presence of Chinese companies like Chery and DFSK Motor further solidifies their position in the country. However, concerns about the quality and reliability of Chinese electric cars remain among some consumers.

Despite the doubts, the potential for electric vehicle growth in Indonesia is significant. With government support, increased infrastructure, and advancements in technology, the country has the opportunity to become a major player in the EV market.

FutureCar Staff